MicroStrategy has been ready for its bitcoin HODL for at least a century.
Or rather that Michael Saylor, the founder and CEO of a business intelligence firm, said in an interview with CoinDesk on Tuesday, immediately after announcing on Twitter that MicroStrategy was doubling down on the Godfather cryptocurrency with the purchase of $ 175 million more BTC .
“I want something that I can put in $ 425 million for 100 years,” Sailor told CoinDesk.
In the last two months Saylor has turned its company’s once-in-a-lifetime cash surplus on bitcoin into bets of nearly half a billion dollars, “Digital Gold” Saylor will surely end its tenure.
“if [my successor is] Staring at this thing, it is still working, ”he said.
“This Thing” is a heaping pile of 38,250 bitcoins. The publicly traded firm made a $ 250 million purchase on August 11, 11 days after telling shareholders that cash was no longer a safe place for its additional 500 million. On Tuesday morning, it bought $ 175 million more.
Read more: MicroStrategy buys $ 175M more in Bitcoin, BTC Holdings for $ 425M
Saylor said forget about balance sheet surplus parking in inflation-free cash or low-yield bonds or overtaken tech stocks. In such a market – and he said in the future is sure to come – there are only two good places to put extra cash to work: stock buybacks and bitcoins.
This is a radical face for the man who announced the days of bitcoin seven years ago.
An unexpected revelation
During COVID-19 “I went down the rabbit hole”, Sailor said, suspecting bitcoin in the $ 600 range, assuming “he was wrong”.
“I wish I had known what I knew now.”
The first step of their journey of conversion came from an unexpected source for a newly created bitcoin maximist: the sale of the “Voice.com” domain to EOS creator Block.on in July 2019 for $ 30 million.
Fast forward to 2020, and Saylor found himself studying on bitcoin. The more they learned about crypto, the faster. Saylor said he considered essays for “bitcoin luminaries”, listened to Nathan Whitemore, and Anthony Pompliano’s crypto podcast, airing the internet for Peter Schiff’s Bitcoin Debate with Eric Voorhees, and himself by Andreas Antonopoulos’s media Lost in the empire.
The global trade crisis of COVID-19 was indeed a boon for MicroStrategy. Saylor said the firm soon realized that it had excess cash to operate in a new streamlined virtual-first world.
Moving away from the dollar is now the primary concern of the cellar. He said that he cannot take inflationary risks.
In bitcoin, he and the firm’s decision makers have found what they call Qi Infinity’s obvious choice for the coming century.
“I am happy and start doing homework”, according to microstregy executives and directors, Sailer said. He staged “a series of learning exercises to speed everyone.” If MicroStrategy was really going to transfer millions to bitcoin, everyone should have been on board.
How to go all-in
There was a lot of ground to cover, Saylor said. But in three months’ time, he and his executives received crypto education, and dealt with myriad legal, custodial, and security issues that they said were standing in the way of publicly traded companies getting into crypto.
Then, in late July, executives unveiled the game plan on the firm’s Q2 earnings call: MicroStrategy wanted to invest up to $ 250 million over the next 12 months “in one or more alternative investments or assets including stocks, bonds, Can include commodities etc. in the form of gold, digital assets such as [b]itcoin, or other asset type, ”MicroStrategy resident Fong Lee said on 28 July.
It was an announcement that was so enveloped in corporate ambiguity that no one noticed the news.
A week passed before Matt Walsh, partner at Castle Island Ventures Tweet. He noted how the Nasdaq-traded stock is “diversifying its cash holdings to include bitcoin.”
Walsh gave the news a double-eye emoji. Look at this, he was saying.
Observers did not have to wait long.
Six days later MicroStrategy poured all $ 250 million of its inflation-hedging surplus into bitcoin. The promise to diversify into gold and other alternative assets was a 12-month deadline. All bitcoins, all the time.
By September, its board of directors had recognized bitcoin as the microstarter’s primary treasury reserve and indicated in an SEC filing that more purchases could be on the way.
Read more: MicroStrategy tells SEC that $ 250M bitcoin reserve may increase
It shattered the self-imposed $ 250 million bitcoin ceiling after hours.
As of press time, MicroStatty has converted $ 425 million into bitcoin. The stock has gained 30% since purchasing the first bitcoin on August 11. It was up 9% on Tuesday.
Other publicly traded tech firms – think Apple and Google – park billions of additional capital in cash and leave it for years. But Saylor did not want to leave millions of MicroStrategy in a bank account, where the audience of inflation may slowly overcome it.
“We just had a terrible feeling that we were sitting on top of a $ 500 million ice cube that’s melting,” Sailer said. MicroStrategy has introduced bitcoin as a treasury option.
“It’s not a speculation, nor is it a defense,” said Saylor. “It was a deliberate corporate strategy to adopt a bitcoin standard.”